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Published On: Wed, Jan 14th, 2015

Senate confirms Joseph Nnanna as CBN Deputy Gov.

Nigerian-Senate-1By Ikechukwu Okaforadi

The Senate on Tuesday approved the nomination of Dr. Joseph Nnanna as Deputy Governor of Central Bank of Nigeria (CBN).

Nnanna’s confirmation followed consideration of the report on his screening by the Senate’s Joint Committee on Banking, Insurance and other Financial Institutions.

The committee had in its report, described Nnanna as a vibrant economist, who convinced members of the screening committee of his capacity to assume the position.

Announcing the confirmation, President of the Senate, David Mark, congratulated Nnanna on behalf of the lawmakers, and expressed optimism that the CBN would play a prominent role in the resolution of the current economic situation of the country.

He encouraged the apex bank to work assiduously in tackling the effect of the declining price of crude oil in the international market, on the nation’s economy.

News Agency of Nigeria (NAN) reports that answering questions from the lawmakers shortly before his confirmation, Nnanna said that one of the ways to tackle the current economic crisis was to recapitalise development banks.

“My take is that since we have development banks like the Bank of Industry (BOI), NEXIM Bank, Bank of Agriculture and so on, we can recapitalise all of them. We can then mandate them to lend at a fixed interest rate to entrepreneurs and other investors willing to invest in Nigeria’s economy.

“If we recapitalise the BOI and we tell the Managing Director that we are giving him this money and ask him to lend at a specific interest rate, he will oblige us, because it is the tax payers money.

“We cannot force the management of a private-commissioned bank to lend at a fixed rate. This is because they will take into consideration, the risk premium, especially when most people borrow without the intention of repayment,’’ he maintained.

He also noted that the non-performing loans in the country were very high and that banks’ balance sheets were landing on the loans.

He said that the nation had gone beyond the era of fixed interest rate.

He also stressed the need for policy makers to be very careful while “navigating the unholy trinity that is the relationship between interest rates, exchange rate and inflation”.

 

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